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"Housing is an investment" is just a sales tactic that took over and went insane. It's only really used to justify the humungous loan payments you're willing t
by bombcar 1y ago
"Housing is an investment" is just a sales tactic that took over and went insane.
It's only really used to justify the humungous loan payments you're willing to take on.
I'd happily take a $1 house if it was guaranteed to never change in value; but it also served my needs.
It's moderately fun to try to figure out what a "healthy" home market would look like - probably something similar to cars; "used" houses should sell for significantly and noticeably less than "new" ones (all things considered). But location and constraints often invert this - the new houses are so far away that they sell for less than the old ones in more favorable locations.
The scary thing is that ONCE you are metrically fuckton in debt, you become exceptionally concerned with the valuations, because once it trends to level or goes under, you're stuck!
- jameslk 1y agoIt probably looks somewhat like this: https://psmag.com/economics/inside-japans-disposable-home-market-88133/ https://psmag.com/economics/inside-japans-disposable-home-ma...
- bluGill 1y agoHealthy means the value of a house is the value of the land, plus the value of building a new house exactly like it minus depreciation (meaning if you replace something the value goes up). Builders of course need a reasonable profit so that is factored into the value. The reason why the bay is unhealthy is they don't allow you to put something on the land that matches the value of that land. People who want to spend millions on a house should be getting a mansion not a small house. People who buy a small house should get it on a lot not worth much money. I'm not sure of a good number, but something like only 1/3rd of the value should be the lot, 2/3rd the structure. This is right for most people, but there is nothing wrong with wanting a mansion in an area of tiny houses, or a tiny house on a massive lot if that is how you want to live (if a farm lets count the house separate from the rest of the farm buildings - not that this is possible but ...)
- crooked-v 1y agoThe market you're describing is pretty similar to the Japanese one, where the land keeps its value but the home itself depreciates over time, and old-enough houses are assumed to be teardowns unless proven otherwise.